The Economic Equilibrium Calculator helps determine the price and quantity at which the supply of goods equals the demand. This point is known as the equilibrium point. It reflects a stable market condition where no surplus or shortage exists. By using basic algebra, the calculator makes it easy to find this balance without manually solving equations.
This calculator is especially useful for students, economists, business analysts, and decision-makers who deal with pricing, production planning, or market predictions. It belongs to the category of economic and financial modeling calculators.
formula of Economic Equilibrium Calculator
Demand Function: Qd = a - bP
Where:
a = Y-intercept of the demand curve (quantity demanded when price is zero)
b = Slope of the demand curve (change in quantity demanded for a one-unit change in price)
P = Price
Supply Function: Qs = c + dP
Where:
c = Y-intercept of the supply curve (quantity supplied when price is zero)
d = Slope of the supply curve (change in quantity supplied for a one-unit change in price)
P = Price
Equilibrium Condition: Qd = Qs
Substitute the demand and supply functions: a - bP = c + dP
Solve for P: P = (a - c) / (b + d)
Substitute P back into either the demand or supply function to find Q:
Q* = a - bP* or Q* = c + dP*
Helpful Reference Table
Below is a general table of example values for demand and supply constants, showing how equilibrium price and quantity can vary.
| a (Demand Y-int) | b (Demand Slope) | c (Supply Y-int) | d (Supply Slope) | Equilibrium Price (P) | Equilibrium Quantity (Q) |
|---|---|---|---|---|---|
| 100 | 2 | 20 | 3 | (100 - 20) / (2 + 3) = 16 | Q = 100 - 2×16 = 68 |
| 120 | 4 | 40 | 2 | (120 - 40) / (4 + 2) = 13.33 | Q = 120 - 4×13.33 ≈ 66.67 |
| 80 | 1.5 | 10 | 2.5 | (80 - 10) / (1.5 + 2.5) = 17.5 | Q = 80 - 1.5×17.5 = 53.75 |
You can use this table to get a rough idea of equilibrium points without calculating every time.
Example of Economic Equilibrium Calculator
Let’s take a simple example:
- Demand Function: Qd = 90 - 2P
- Supply Function: Qs = 30 + 3P
Step 1: Set Qd = Qs
90 - 2P = 30 + 3P
Step 2: Solve for P
90 - 30 = 2P + 3P
60 = 5P
P = 12
Step 3: Find Q
Q = 90 - 2×12 = 66
Or
Q = 30 + 3×12 = 66
Equilibrium Price = 12
Equilibrium Quantity = 66
Most Common FAQs
Economic equilibrium is the point where the quantity demanded by buyers equals the quantity supplied by sellers. It reflects a balanced state where there's no excess supply or demand.
It helps businesses and economists understand the ideal price and output level for a product in the market. This can support pricing strategies and inventory planning.
In a perfect model, yes. But in real life, prices often fluctuate due to external factors like policy changes, competition, or changes in consumer behavior.